Payday loan group paid KSU for favorable research, records show

By: Willoughby Mariano, Atlanta Journal-Constitution, April 4, 2019

Georgia considers payday loans so hazardous to borrowers that they’re banned within state lines. U.S. military officers testified before state lawmakers that the high interest, short-term paycheck advances drown sailors and soldiers in debt. At one point, the U.S. Consumer Financial Protection Bureau, a federal consumer watchdog agency, planned a crackdown.

So when a Kennesaw State University study concluded that borrowers who take out a long string of payday loans fare better than those who don’t, industry advocates used it to fight off the planned crackdown. A Washington, D.C., lobbyist hand-delivered the report to a key administrator with the federal agency days before its public release, recently-released KSU emails show.

This was no ordinary academic study. The Consumer Credit Research Foundation, a group run by a payday loan industry backer, gave KSU $30,000 for the research, payable upon completion of the paper, a consulting agreement obtained by The Atlanta Journal-Constitution shows.

The foundation sought out a KSU professor who had never published research on the subject, overlooking experts who have studied payday lending’s impact on consumers for years. It directed her approach, selected the data, and at one point, asked her to re-do her work, according to the consulting contract and other records.

“What’s so egregious in this case is it’s not just that payday lenders paid for the study, it’s that they actually wrote the study,” said Daniel Stevens, executive director for the Campaign for Accountability, which has complained about the industry’s attempts to influence scholarly research for years. The Washington, D.C., nonprofit released more than 400 pages of internal KSU emails about the December 2014 study in recent weeks, after fighting a three-year legal battle to obtain the public records that went to the Georgia Supreme Court.

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